Reaching the Consumers | Distributing a Product | Market Access Procedures | Organizing Goods Transport | Identifying a Supplier

Reaching the Consumers

Marketing Opportunities

Consumer Behavior: After decades of fixed prices policies under the Soviet Union era, the Armenian consumer is discovering the realities and the variety of goods of a free market economy. The Armenian consumer is very price sensitive but is also eager to be able to choose between several products. Foreign goods and brand names are very attractive to such consumers.

Consumer Profile and Purchasing Power: Armenia's domestic market is not very big. The lowest categories of consumers are focused on the prices of products and buy mainly basic products. Indeed, there is still a high rate of poverty in Armenia.

Those with higher purchasing power are interested by foreign brand names and new technologies and products. Other "temporary" consumers are also the Armenians who temporarily come from other countries to spend some time in Armenia. Those are the Armenians of the diaspora who constitute six million people outside Armenia, twice as many as those who live inside Armenia. They mainly live in the USA, Europe (France, Belgium etc) and the Middle East. Their purchasing capacity is greater than the local population and they can contribute to the expansion of some sectors like construction (as they buy properties in their homeland) and are also potential consumers of Armenian traditional items like carpets, wine, jewelry, etc.

Consumers Associations: Association for the protection of consumer's rights.

Main Advertising Agencies: BTL Services - advertising agency

Distributing a Product

Market Shares: The markets of Yerevan dominates the retail trade sector in Armenia.

Market Access Procedures

International Conventions

Member of World Trade Organisation
Party to the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal
Party to the Montreal Protocol on Substances That Deplete the Ozone Layer

Main International Economic Cooperation

Among others, Armenia is member of the Commonwealth of Independent States (CIS), of the Conference on Security and Cooperation in Europe (CSCE), of the World Bank etc.

Non Tariff Barriers

Armenia is considered as having one of the most open tariff regimes. Although Armenia is a member of WTO and the Customs Code is in full compliance with WTO rules, the application of market value, rather than transaction value, in the valuation of goods is a common practice, creating an unpredictable and intimidating environment for international traders as well as domestic firms. At the same time, customs officials complain that importers systematically under-report the transaction value of goods to avoid tariffs. Besides, it should be noted that there is no quota for imports from other WTO member countries.

Most imports are free of licensing requirements. However, there are some restrictions for health, security, or environmental reasons. Medicines must be authorized by the Ministry of Health and agricultural chemicals by the Ministry of Agriculture.
In the event of compliants against the Customs Authorities the importer may appeal to the superior Customs authority or to the courts.
For more details on customs regulations, visit Armenian Customs Service.

Customs Duties and Taxes on Imports

10%

Customs Classification: Armenia uses the Harmonized system of Tariffs classification. Tariffs are in ad valorem and levied on C.I.F values. Armenia is member of the World Customs Organization and uses the transaction value method of customs valuation, based on the provisions of the 1994 GATT Agreement on the implementation of Article VII.
Import Procedures: Customs duties are mandatory payments regulated by the country's Customs Code.
A uniform rate of 10% applies to majority of the imports (all exports from Armenia are duty free). Some essential goods like foodstuffs, raw materials and fuels are exempted from customs duties. A customs declaration form must be presented along with a pro forma of the goods being imported. Tobacco and spirits require certificates of quality issued by the national certification body, Armexpertiza.
Also, according to the Customs Code no duties are levied on goods in the following categories:
- Transit shipments;
- Importation into a customs warehouse;
- Importation into a customs free warehouse;
- Importation into a duty free shop;
- Temporary importation for inward processing;
- Temporary importation.
Importing Samples: Sample products should be declared at the entry in the country.
As they are also considered as temporary "importation", no particular taxes should apply.

For Further Information: Customs of Armenia

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Organizing Goods Transport

Main Useful Means of Transport: Because of the embargo of Turkey and Azerbaijan, goods to Armenia and from Armenia should transit using the Georgian route. Goods from or bound to Europe and beyond enter or exit the Georgian ports of Batumi and Poti. Therefore, mainly road transportation is used until Georgia, when sea transportation is then used.
Ports: Ministry of Transport and Communication, Republic of Armenia
Association of International Road Carriers of Armenia.
The Railways of Armenia
Civil Aviation, Government of Armenia
Airports: Zvartnots International Airport (main airport located at Yerevan)
Erebuni airport
Shirak airport (serving gyumri province)
Sea Transport Organizations: Ministry of Transport and Communication
Air Transport Organizations: General Department of Civil Aviation
Road Transport Organizations: Ministry of Transport
Rail Transport Organizations: Ministry of Transport and Communication

Identifying a Supplier

Type of Production: Armenia's industrial sector contributes 45% to the GDP. Agriculture, IT sector, Electronics and Precision Engineering, Mining, Chemical and Pharmaceuticals, Jewelry and Diamonds processing, Textile and Clothing constitute the main industries.

Armenia's IT sector receives signficant attention as a possible growth industry. It currently employs between 3,500 and 4,000 people. Besides, productivity is high and wages low in comparison with Europe and the USA, and the level of education is quite high, thus making this sector quite competitive.

The clothing sector shows also great prospects. Cheap labor, existing factories and a positive trade regime (including free access to CIS markets) create favorable condtions for investment in light industries like textiles, carpets, footwear and apparel.

Construction has been the leading sector of the economy for the past six years. The sector accounts for 26% of the country's GDP. Growth in construction is mainly driven by an increased demand for higher quality housing funded primarily by remittances. Diaspora Armenians seeking a base in Armenia have also significantly contributed to the sector's demand.

Business Directories

Multi-sector Directories: Armenia Building Directory - Building and construction portal of Armenia.
All.biz - Armenia - Directory of companies in Armenia.
Armenian BD - Armenia's business directory.
Spyur - Company registry of Armenia.

Manufacturers Associations of the Main Industries: 2 professional associations listed for Armenia.

Trade Agencies and Their Representations Abroad: Chamber of Commerce and Industry of the Republic of Armenia
Enterprises Federation: Union of Manufacturers and Businessmen of Armenia

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